Correlation Between Citigroup and Nice
Can any of the company-specific risk be diversified away by investing in both Citigroup and Nice at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Citigroup and Nice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citigroup and Nice, you can compare the effects of market volatilities on Citigroup and Nice and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Citigroup with a short position of Nice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citigroup and Nice.
Diversification Opportunities for Citigroup and Nice
Almost no diversification
The 3 months correlation between Citigroup and Nice is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Citigroup and Nice in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice and Citigroup is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Citigroup are associated (or correlated) with Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice has no effect on the direction of Citigroup i.e., Citigroup and Nice go up and down completely randomly.
Pair Corralation between Citigroup and Nice
Taking into account the 90-day investment horizon Citigroup is expected to generate 1.72 times less return on investment than Nice. But when comparing it to its historical volatility, Citigroup is 1.32 times less risky than Nice. It trades about 0.03 of its potential returns per unit of risk. Nice is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 6,441,000 in Nice on January 24, 2024 and sell it today you would earn a total of 2,371,000 from holding Nice or generate 36.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 78.95% |
| Values | Daily Returns |
Citigroup vs. Nice
Performance |
| Timeline |
| Citigroup |
| Nice |
Citigroup and Nice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citigroup and Nice
The main advantage of trading using opposite Citigroup and Nice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citigroup position performs unexpectedly, Nice can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nice will offset losses from the drop in Nice's long position.| Citigroup vs. JPMorgan Chase Co | Citigroup vs. Wells Fargo | Citigroup vs. Toronto Dominion Bank | Citigroup vs. Nu Holdings |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| AI Investment Finder Use AI to screen and filter profitable investment opportunities | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |